SEOUL (AFP) – South Korea’s two biggest electronics firms both forecast jumps of around 40 per cent in their first-quarter operating profits yesterday, with coronavirus-driven working from home fuelling global demand for semiconductors and home appliances.
Tech behemoth Samsung Electronics said in an earnings estimate that it expected operating profit of KRW9.3 trillion for January to March, up 44.2 per cent from a year earlier, largely driven by robust sales of smartphones and the launch of its flagship Galaxy S21 series.
Meanwhile, LG Electronics, South Korea’s second-largest appliance firm after Samsung, forecast a 39.2-per-cent jump in operating profit for the same period, to KRW1.5 trillion.
“Both quarterly revenue and operating profit are the highest in the company’s history,” it said in a statement. The Samsung figures were ahead of expectations, said Vice President Gloria Tsuen at Moody’s Investors Service, telling AFP that “tight supplies in the semiconductor segment, especially DRAM”, among others, had helped the firm’s performance.
Analyst forecasts had averaged KRW8.88 trillion according to Bloomberg News.
Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th-largest economy.
It is crucial to the country’s economic health – the conglomerate’s overall turnover is equivalent to a fifth of the national gross domestic product.
Meanwhile, LG Electronics shares dropped 0.94 per cent at the end of yesterday’s trade.
Earlier this week, the firm said it was closing down its mobile phone business, after the division lost billions in recent years.